BILL NUMBER: SB 1038	CHAPTERED  05/05/00

	CHAPTER   18
	FILED WITH SECRETARY OF STATE   MAY 5, 2000
	APPROVED BY GOVERNOR   MAY 5, 2000
	PASSED THE SENATE   MAY 1, 2000
	PASSED THE ASSEMBLY   APRIL 24, 2000
	AMENDED IN ASSEMBLY   MARCH 29, 2000
	AMENDED IN ASSEMBLY   FEBRUARY 18, 2000
	AMENDED IN ASSEMBLY   SEPTEMBER 10, 1999
	AMENDED IN ASSEMBLY   SEPTEMBER 10, 1999
	AMENDED IN ASSEMBLY   JULY 7, 1999
	AMENDED IN SENATE   MAY 28, 1999
	AMENDED IN SENATE   APRIL 29, 1999
	AMENDED IN SENATE   APRIL 14, 1999
	AMENDED IN SENATE   APRIL 6, 1999

INTRODUCED BY   Senator Burton

                        FEBRUARY 26, 1999

   An act to amend Section 30163 of the Revenue and Taxation Code,
relating to taxation, and declaring the urgency thereof, to take
effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1038, Burton.  Taxation: cigarette tax.
   The Cigarette and Tobacco Products Tax Law requires that an
appropriate stamp be affixed to, or that an appropriate meter
impression be made upon, each package of cigarettes prior to
distribution, and prohibits any stamping or metering of packages of
cigarettes unless those packages comply with federal labeling
requirements for cigarettes to be sold within the United States.
Existing law requires the State Board of Equalization to revoke the
license issued to a distributor that is determined to be in violation
of these stamping or metering requirements.  Existing law provides
for the forfeiture of the cigarettes in packages that are in
violation, and provides that a violation of those requirements
constitutes unfair competition.
   This bill would additionally prohibit any stamp or meter
impression from being affixed to, or made upon, packages of
cigarettes if the package bears a cigarette brand name which is a
registered U.S. trademark of a participating manufacturer, as
defined, and the package was imported by anyone other than the
participating manufacturer of that cigarette brand.  By creating a
new crime in the form of a misdemeanor for a violation of these
requirements, this bill would establish a state-mandated local
program.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
  The bill would declare that it is to take effect immediately as an
urgency statute.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 30163 of the Revenue and Taxation Code is
amended to read:
   30163.  (a) Except as otherwise provided in this section, an
appropriate stamp shall be affixed to, or an appropriate meter
impression shall be made on each package of cigarettes prior to the
distribution of the cigarettes.
   (b) No stamp or meter impression may be affixed to, or made upon,
any package of cigarettes if any one of the following occurs:
   (1) The package does not comply with all requirements of the
Federal Cigarette Labeling and Advertising Act (15 U.S.C. Sec. 1331
and following) for the placement of labels, warnings, or any other
information upon a package of cigarettes that is to be sold within
the United States.
   (2) The package is labeled "For Export Only," "U.S. Tax Exempt,"
"For Use Outside U.S.," or similar wording indicating that the
manufacturer did not intend that the product be sold in the United
States.
   (3) The package, or a package containing individually stamped
packages, has been altered by adding or deleting the wording, labels,
or warnings described in paragraph (1) or (2).
   (4) The package was imported into the United States after January
1, 2000, in violation of Section 5754 of Title 26 of the United
States Code.
   (5) (A) The package bears a cigarette brand name which is a
registered U.S. trademark of a participating manufacturer and the
package was imported by anyone other than the participating
manufacturer of that cigarette brand.
   (B) For purposes of this paragraph, "participating manufacturer"
has the same meaning as defined in paragraph (1) of subdivision (a)
of Section 104557 of the Health and Safety Code and in Section II(jj)
of the Master Settlement Agreement described in Article 3
(commencing with Section 104555) of Chapter 1 of Part 3 of Division
103 of the Health and Safety Code.
   (c) Pursuant to its authority under Section 30148, the board shall
revoke the license issued to a distributor that is determined to be
in violation of this section.
   (d) A violation of subdivision (b) shall constitute unfair
competition under Section 17200 of the Business and Professions Code.

  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only costs that may be incurred by a local agency or school district
will be incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.
  SEC. 3.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect.  The facts constituting the necessity are:
   In order to encourage affiliation with and investment in
California businesses and to clarify the status of imported
cigarettes under the Cigarette and Tobacco Products Tax Law, it is
necessary that this act take effect immediately.
